In talks with South Asian nations for trade in rupee: RBI Governor
New Delhi, January 6
RBI Governor Shaktikanta Das on Friday said the government and the central bank were in talks with South Asian countries to have cross-border trade in rupee.
“For UPI, we have already signed agreements with countries like Bhutan and Nepal. We are trying to provide the UPI facility to make cross-border payments much easier in this region. The other initiative is the rupee settlement of international trade. We are already in discussions with some countries in the South Asian region,” Das said. In his keynote address at an IMF conference here, Das said the central bank digital currency (CBDC) was in a trial phase and the RBI was moving “very carefully and cautiously on digital rupee launch”.
He said keeping a check on inflation and external debt should be the top priorities for South Asian countries, including India, in order to not hurt growth and investment prospects.
During the first three quarters of 2022, food inflation in South Asia averaged more than 20 per cent. The region’s heavy dependence on imported fossil fuels had also made it vulnerable to imported inflation, said the RBI chief, while calling for greater cooperation among South Asian countries, especially on the energy front.
The RBI chief said India had taken steps to forge greater energy cooperation with neighbours. “Besides an oil pipeline to Nepal, India and Bangladesh have agreed to enhance sub-regional connectivity in this sphere by linking power grids. The 130-km India-Bangladesh Friendship Pipeline Project will have a capacity to export petroleum products of 1 million metric tonnes per annum. “Today, intra-regional trade is currently one-fifth of its potential, implying an annual shortfall of $44 billion,” said the RBI chief, quoting a World Bank assessment which suggested that a common electricity market for Bangladesh, Bhutan, India and Nepal could save $17 billion in capital costs.
